Marginal cost
A)Is the additional cost incurred by producing and selling one more unit
B)Is the total cost incurred by producing and selling one more unit
C)Is the additional fixed cost incurred by producing and selling one more unit
D)None of the above

Question

Quizplus · Accepted Answer

Marginal cost is the additional cost incurred by producing and selling one more unit. It takes into account only the variable costs that increase with each additional unit produced, such as the cost of raw materials or labor. Fixed costs, such as rent or salaries, are not included in the calculation of marginal cost.

Marginal Cost